Thursday, December 9, 2010

Interesting! PTPTN cannot appoint private lawyers to sue students!



Salam and Hi all,


As promise in my facebook page, i post one interesting case I handled recently. The case was regarding PTPTN suing one person for 'so-called default' in paying his study loan given by PTPTN. I do not wish to touch on the details of the case's merit but rather stick to only one issue of NULLITY in such civil action.


After I got the instruction to defend the case, I prepared all the necessary papers such the defense statement, notice of appearance and so on. I also prepare one notice of preliminary objection (PO) to be served onto the plaintiff's solicitor (PTPTN) as required under the rules.


The PO stating and demanding that defendant shall plead to the court to have the whole suit dismiss with cost due to illegality and nullity of the action.


Reasons: section 58 of the Perbadanan Tabung Pendidikan Tinggi Nasional Act 1997 Act A1296 ("the Act") which was interpreted by the High Court at Sibu EXCLUDE the private lawyers from representing any suit brought by PTPTN against any defaulted student (or any person).


Section 58 reads as follows:


58. Conduct of civil proceedings


Notwithstanding the provisions of any written law, in any civil proceedings by or against the Perbadanan.


(a) Any person holding the appointment of Federal Counsel and authorized by the Attorney General for the purpose; or
(b) Any officer of the Perbadanan authorized in that behalf by the Chairman, may, on behalf of the Perbadanan, institute, appear in and conduct such proceedings and may make and do all appearances, acts and applications in respect of such proceedings.


The section clearly exclude private lawyers.


Now, since the case I handle was presented by a private lawyer, it was within the restriction of the above.


The case was set for preliminary objection hearing on last 8/12/2010, and after due process of submission the Learned Magistrate allowed the objection and dismissed the case with cost on the ground that PTPTN does not have any statutory right to appoint private lawyers to sue defaulters as per judgment of the Sibu High Court.


I append bellow the judgment for your reading satisfaction (it is quite lengthy for you, but the important part is the PO issue, the rest are really worth ready for total understanding the issues).


Before that I would like to emphasize myself that I do not condone the act or attitude of 'not paying your study loan', this post is just to make sure that PTPTN to be more responsible in carrying its statutory and social duty.


IN THE HIGH COURT IN SABAH AND SARAWAK


AT SIBU


11A-2-2010


BETWEEN


TIONG SIEW MING ….APPELLANT


AND


PERBADANAN TABUNG PENDIDIKAN ….RESPONDENT


TINGGI NASIONAL


RULINGS


1. This is the Appellant's (Defendant in the Magistrate's Court) appeal against the decision of the learned Magistrate in allowing the Respondent's (Plaintiffs in the Magistrate's Court) application for summary judgement by entering a judgement for the sum of RM22,376.29 as at 26th June 2007 with interest thereon at the rate of 8% per annum from 26th June 2007 to the


date of full payment.



2. The sum of RM22,376.29 claimed by the Respondent's claim against the Appellant is the outstanding educational loan facility granted by the Respondent to the Appellant.


3. It is at the foremost in my mind that a hearing of Order 14 appeal is by way of rehearing. (See: Malayan Insurance (M) Sdn. Bhd. v. Asia Hotel Sdn. Bhd. [1987] 1 CLJ 246.


SIDE ISSUE


4. At the outset, the Appellant raised a side issue which had also been raised in the Magistrate's Court by way of preliminary objection, the same was dismissed by the learned Magistrate.


5. It is to be noted that the Respondent filed the initial summons on 9th June 2008 (amended and redated 16th April 2009) against the Appellant through their appointed solicitors Zaid Ibrahim & Co ("ZICO"). The filing of the action was after the insertion of the Perbadanan Tabung Pendidikan Tinggi Nasional Act 1997 Act A1296 ("the Act") which came into force from 20th July 2007.


6. Section 58 of the Act provides for conduct of civil proceeding, states:



58. Conduct of civil proceedings


Notwithstanding the provisions of any written law, in any civil proceedings by or against the Perbadanan.


(a) Any person holding the appointment of Federal Counsel and authorized by the Attorney General for the purpose; or


(b) Any officer of the Perbadanan authorized in that behalf by the Chairman, may, on behalf of the Perbadanan, institute, appear in and conduct such proceedings and may make and do all appearances, acts and applications in respect of such proceedings.



7. In light of the provision in section 58 of the Act, it was argued for the Appellant that ZICO as a private legal firm does not fall within the "persons" listed under section 58 of the Act who has the authority to represent Perbadanan Tabung Pendidikan Tinggi Nasional ("PTPTN") in civil proceedings. Hence, the civil proceedings instituted by ZICO in the Magistrate's Court is a nullity.


8. In response, it was submitted for the Respondent that this side issue is res judicata because the same matter had been raised in the Magistrate's Court by way of preliminary issue and it has been dealt with and dismissed by the learned Magistrate. Since there was no appeal against the learned Magistrate's decision on the preliminary objection and the appeal period has lapsed, the decision of the learned Magistrate thereon is final and binding on the parties to the action.


9. I regret I do not agree with the Respondent. In my opinion, the learned Magistrate's ruling on the preliminary objection does not fall within the word "decision" in Order 49 r 6 of the Subordinate Courts Rules 1980 as it does not determine on the right of the parties. Hence, it was not appellable. (See, Tentuan J&S Holding Sdn. Bhd v. A Karim Hasan & Anor [200] 4 CLJ 152. Accordingly, the issue of res judicata does not arise.


10. The Respondent submitted the authority of ZICO to represent the Respondent is based on section 35 of the Act, which states: "Appointment of agents, consultants, etc The Perbadanan may appoint or employ such agents, consultants including advocates and solicitors, or other persons to transact any business or to do any act required to be transacted or done in the execution of its functions or for the better carrying into effect the purposes of this Act.


11. Emphasis was put on the words "…consultants including advocates and solicitors…..to transact any business or to do any act required to be transacted or done in the execution of its function or for the better carrying into effect the purposes oft this Act"


12. A question is posed: does the foregoing words "consultant including advocates and solicitors" provides the power for appointment of ZICO?


13. It must be borne in mind that when construing an Act of Parliament, the court is to interpret the statute in order to ascertain legislative intent by reference to the words appearing in the particular enactment. Prima facie, every word appearing in an Act must bear some meaning for Parliament does not legislate in vain by using meaningless words and phrases. (Krishnadas a/l Achutan Nair & Ors v Maniyan a/l Samykano [1997] 1 MLJ 96, per Gopal Sri Ram JCA).


14. In the Words, Phrases & Maximx – Legally & Judicially, the word "consultant" is defined as "One who gives professional advice". From this definition it can be safely said that the appointment of solicitors and advocates is confined to giving professional advice to PTPTN. Nothing in section 38 gives authority to ZICO, a legal firm, to institute, appeal in and act for PTPTN in Civil proceedings.


15. The principle governing the rule of construction expressed in the maxim generalibus specialia derogant is that where there are two provisions of written law, one general and the other specific, the special or specific provision excludes the operation of the general provision. (See: Luggage Distributors (M) Sdn. Bhd. v Tan Hor Teng [1995] 3 CLJ 520).


16. Section 58 is a provision which specifically deals with conduct of civil proceedings and the person who could institute, appear in and conduct such proceedings and may make and do all appearances, acts and applications in respect of such proceedings on behalf of PTPTN. It excludes the general provision in Section 35 of the Act. Thus, ZICO has no authority to represent PTPTN in civil proceeding.


17. I find merits in this side issue. As such, the civil proceeding instituted by ZICO in the Magistrate's Court is a nullity.



APPEAL PROPER


18. I shall for the completeness proceed to deal with the appeal proper.



Issue No. 1: The appellant did not owe the Respondent the sum of RM22,376.29 as claimed by the Respondent.


Issue No. 2: No particulars have been provided by the Respondent as to how the sum of Rm22,376.29 was arrived at.


19. At the outset, I am compel to disagree with the Appellant's submission that in a summary application, the burden of proof is on the Plaintiff to prove its case and to show that the action against the Defendant is "virtually uncontested and incontestable.".


20. The Respondent's application in the present case is made under Order 26A (equivalent to Order 14 Rules of High Court) for summary judgement. The correct legal position is that the burden is upon the defendant to satisfy the court that there is an issue or question in dispute which ought for some other reason to be trial of that claim. (Per Chong Siew Fai J in Huo Heng Oil Co. (E.M.) Sdn. Bhd. v Tong Tiew Yong [1987] 1 MLJ 139.


21. I opined these two issues are inter-related and can be dealt with together.


22. For the Appellant, it was contended that the Respondent claimed for a sum of RM22,376.29 which comprised the principal sum of RM19,500.00 allegedly disbursed to the Appellant and the rest is the administration costs of 4% per annum and incident costs as at 25th June 2007 (See, Para 5 of Affidavit in Reply affirmed by Nur Zulkarnain bin Che Azmi at page 32 Record of Appeal). It was contended that the Respondent has failed to set out how it derived the sum of RM22,376.29.


23. It must be noted that the Appellant did not dispute that an educational loan had been granted to her pursuant to the Education Loan Agreement dated 13th August 1999. Nor did the Appellant challenge the terms and conditions contained in the Offer Letter (Exhibit NZ-1) and the Education Loan Agreement (Exhibit NZ-2 annexed to the Affidavit in Support).


24. It is to be further noted that pursuant to the Education Loan Agreement letter of Offer, the Respondent is entitled to charge administration costs at the rate of 4% per annum and accidental costs incurred. (See, Item 1 of Exhibit NZ-1 annexed to Affidavit in Support, page 16 Record of Appeal).


25. Given that the study loan is in the sum of RM19,500.00, the balance sum of RM2,876.29 (RM22,376.29 – 19,500.00) must be for the administration costs of 4% per annum and incidental costs which the Plaintiff is entitled to charge pursuant to the agreed terms in the Offer Letter and the Education Loan Agreement.


26. In the absence of averrment that the calculation of the amount claimed is wrong, a mere averment as to how the Respondent has arrived at the amount of claim could not constitute a trialble issue which warrants the case to go for a full trial.


27. I see no triable issue in Issues No. 1 and No. 2.


ISSUE NO. 3 Was the sum of RM19,500.00 actually disbursed?


28. Learned counsel for the Appellant had in his submission worked out a calculation based on exhibit NZ – 3 to show that the Respondent had only disbursed the principal sum of RM10,500.00 (round off figure) and not RM19,500.00 as claimed.


29. In response, learned counsel for the Respondent submitted – which, I concur - the purported simple mathematical calculation by the Appellant's solicitors were never adduced in the affidavit evidence and was made from the bar. As such, no weight should be given to the allegation and it should be disregard.


30. In any event, it is clearly stated in the statement of account (Exhibit NZ-3) under "Jumlah Pinjaman Setahun" and "tempoh Pinjaman" that the amount of loan was RM6,500.00 for three years totaling RM19,500.00. It also shows that a sum of RM19,500.00 had been granted to the Appellant.


31. I see no triable issue in Issue No.3


ISSUE NO. 4: Whether excessive administration costs was imposed.


32. The issue raised herein is that the sum of RM22,876.29 is inclusive of the principal sum and the administrative costs plus incidental costs. The Respondent prayed for interest at the rate of 4% per annum on the sum of RM22,876.20, which is imposition of interest upon interest. It was submitted that this imposition of compound interest contravenes the proviso (a) to section 11 of the Civil Law Act 1984.


33. I see no merits in this contention. It must be pointed out that the administration costs of 4% per annum which the Respondent is claiming is pursuant to the agreed terms in the Education Loan Agreement entered into between the Appellant and the Respondent.


34. The Appellant also raised issue that as the Respondent had declared that the administration costs is to be charged at the rate of 1% per annum with effect from year 2009 and previously at 3% per annum, how come the Respondent is still claiming administration costs at the rate of 4% per annum?


35. I agree with learned counsel for the Respondent that the Appellant's reliance on the alleged reduced rate for administration costs is misconceived and unsubstantiated. This is because the Offer Letter (Exhibit NZ-1) as well as the Education Loan Agreement (Exhibit NZ-2) have provided for the charging of administration costs at the rate of 4% per annum. Thus, the Respondent is entitled to charge the same in the present case herein.


36. I see no triable in Issue No. 4.


ISSUE NO. 5: Whether the Respondent's claim is statute barred.


37. Learned counsel for the Appellant submitted that the commencement of payment was 10th December 2002 and therefore the cause of action of this action began on 10th December 2002.


38. Article 38 of the Sarawak Limitation Ordinance (Cap 49) provided for three years limitation period "For money payable for money lent". Thus, counting from 10th December 2002 (date of accrual of cause of action herein), the Respondent should commence the action on or before 9th December 2005. Thus, the present action which was filed on 9th June 2008 is two years and six months out of time. Thus, the Respondent's claim against the Appellant is statute barred and ought to be dismissed.


39. It was further argued that section 23A of the Act which provides twelve years limitation period from the date on which the cause of action accrued is of no help to the Respondent. This is because section 23A came into force only on 20th July 2007and it is fundamental principle of law that no statute shall be construed to have retrospective effect unless such a construction clearly appears in the terms of the Act.


40. It was submitted that the question whether the Plaintiff's claim is barred by limitation or not has given rise to a triable issue which is to be decided by the trial court. Pai Khek Meng v Harbi bin Appellant [2006] 7 MLJ 189 was cited in support.


41. I regret I do not agree. It must be noted that the present action was filed on 9th June 2008 after the Act.


42. Section 23A of the Act states; "Notwithstanding the provisions of any written law, any action


founded on contract for educational loans shall not be brought after the expiration of twelve years from the date on which the cause of action accured."


43. The clear wordings in Section 23A has excluded the application of Sarawak Limitation Act.


44. I see no merit in the Appellant's submission. My reason is this. If the present action had been filed before section 23A coming into force, then the amended Act would have no retrospective effect since there is no such provision in the Act. Since the Respondent's action was filed after the coming into force of section 23A, the issue of retrospective application does not arise.


45. Hence, I see no triable issue in Issue No.5.


CONCLUSION


46. Despite the fact that the Appellant had failed to satisfy the court that there is a triable issue which ought to be tried in a trial court, the appeal would still be allowed on the ground that the action instituted and conducted by Messrs Zaid Ibrahim & Co, Advocates in contravention of section 58 of the Act is a nullity. No order as to costs.


Signed


YEW JEN KIE, J.


Date: 22nd July 2010

11 comments:

  1. Adakah ini bermakna perayu dibebaskan dari kontrak?

    ReplyDelete
  2. Tidak, perayu dalam tersebut masih terikat dgn kontrak

    ReplyDelete
  3. Salam En.Irzuan,

    To seek clarity, are you (or your firm) are the solicitors in charge for the abovementioned case (Sabah)? The reported judgment says otherwise.

    It is interesting judgment though, as (I humbly do not know the statistic), based on friends (practising lawyers) experience, normally PTPTN appoints legal firms to bring civil action against its defaulters.

    Please note that the "civil proceedings" clause can be found in other Act, especially involving the "Perbadanan" e.g. PERBADANAN KEMAJUAN KRAFTANGAN MALAYSIA ACT 1979 (Section 35), PERBADANAN KEMAJUAN FILEM NASIONAL MALAYSIA ACT 1981 (Section 28).

    See however, an interesting judgement (Federal Court - on same provision but relating to Perbadanan Kemajuan Kraftangan Malaysia Act 1979 - but allowing private action by Perbadanan represented by Advocates and Solicitors). Note the reference to Section 35 of Legal Profession Act 1976. This case also list down the legislations which have similar provision to Section 58 ot PTPTN Act.

    Much Obliged,
    Nemo Judex In Causa Sua

    ReplyDelete
  4. With due respect sir,the above issue shall be expose with due care. I think you may not aware of one decided case at Federal Court. More research should be done since similar issue had already been decided and reported in CLJ. [2010 5 CLJ 899 FC]

    ReplyDelete
  5. Salam..

    just nak tanya, kalo yg dah dapat notis dari lawyer tu camner yea...mmg akan dikenakan tindakan ke?..Leh wat rayuan atau apa2 yang bole dibuat sbb peminjamnya masih belum bekerja..

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  6. i suppose the corporate body like ptptn should be all the time aware of this restricition,still, i couldnt recall which firm but i am very sure they act for PTPTN in issuing LOD(s) against all defaulted borrowers. so irzuan, is the restriction precludes private lawyer to issue lod? or could it be effective upon pleading etc i.e. court suit per se? i shall wait for your humble feedback.

    miss cate

    ReplyDelete
  7. Anonymous: Apa yang boleh dilakukan ialah memberikan respons kepada surat notis dari peguam. Sekiranya anda belum bekerja, apa yang anda perlu lakukan ialah berjumpa dengan Pegawai PTPTN bagi meminta penangguhan ataupun berbincang dengan mereka tentang pelbagai pilihan pembayaran semula.
    Sekiranya anda mendapat surat saman dari peguam, elakkan dari tidak menghiraukan saman tersebut kerana kegagalan anda untuk menjawab saman itu akan membolehkan PTPTN memasukkan penghakiman ingkar terhadap anda, yang mana akan memaksa anda membayar KESEMUA jumlah yang dituntut dalam tempoh masa terdekat.

    ReplyDelete
  8. Hanif: Indeed. We are aware of the decision of the Federal Court in the said case. However we need to bear in mind that the said case involves the interpretation of Akta Kraftangan which differs from the Akta PTPTN in its structure and purposes.

    As a matter of fact, Heliliah FCJ have this to say;

    “This line of interpreting of legislation so as to create a precedent for purposes of interpreting another legislation is untenable as the legislation relied upon are not pari material”

    Hence, as a matter of prudence and practice, the Federal Court itself had set a precedence that the interpretation of the Akta Kraftangan does not bind the interpretation of Akta PTPTN and as such the disputed word of 'may' should be interpreted independently regardless of what the Federal Court had decide in other cases.

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  9. but in that particular provision the parliament use the word 'may' rather than 'shall' ? The weight is different isn't it ?

    ReplyDelete